Summary of Yihai International Conference Call Company Overview - **Company**: Yihai International - **Industry**: Food and Seasoning Products Key Points Industry and Market Performance - Yihai International's overseas business grew over 30% in the first half of the year, with third-party business growth nearing 50% [2][4] - The company is penetrating the Southeast Asian market through distributors, focusing on the Chinese community and gradually entering mainstream local markets [2][4] - The B-end market shows significant potential, with expectations for continued doubling growth in the second half of the year, despite a potential slowdown next year due to a higher base [2][3] Financial Performance and Projections - The overseas market's profit margin is currently lower than the domestic market, with third-party gross margins around 50% but less favorable cost-effectiveness [5][6] - By 2025, the overseas business scale is projected to reach approximately 200 million RMB, with operational costs impacting profitability [6] - By 2027, the overseas business is expected to achieve a cost-effectiveness ratio similar to the domestic market, potentially reaching comparable net profit levels [6] Product Development and Strategy - The company has made progress in KA channels, providing customized products for major retailers like Walmart and Hema [2][7] - The introduction of new flavors is challenging due to the overall weakness in the restaurant industry, leading to a focus on regional products rather than nationwide hits [8][9] - The company plans to enhance its product structure by increasing the proportion of small B customers, which have higher gross margins [16][23] Cost Management and Profitability - Raw material costs are expected to remain stable, with minor increases not significantly impacting overall profitability [15] - The company aims to maintain gross margins between 23% and 25% through self-production of key ingredients [14][15] - Net profit is influenced by fluctuating expense rates, with expectations for slight improvement in the second half of the year [17] Future Outlook - The company remains optimistic about the B-end market, anticipating continued high growth rates as the restaurant industry recovers [23][22] - Yihai International's competitive edge lies in its pricing and quality advantages in the B-end market, allowing for market share growth despite industry challenges [20][21] Shareholder Returns and Capital Expenditure - The company maintains a generous dividend policy with no significant changes anticipated [18][19] - There are no major capital expenditure plans, as current production capacity is sufficient [19] Conclusion - Yihai International is positioned for growth in both domestic and overseas markets, with strategic initiatives aimed at enhancing profitability and market share in the competitive food and seasoning industry. The focus on B-end market expansion and cost management will be crucial for sustaining growth in the coming years [2][3][23]

Core Insights - The company has launched a new product, Chongqing Gele Mountain Style Spicy Chicken Seasoning, aimed at bringing authentic Chongqing cuisine into home kitchens with a focus on "three layers of crispiness" and convenience [1][3]. Product Features - The new seasoning replicates the authentic flavor of Chongqing spicy chicken, featuring a separate marinating packet to ensure the chicken is well-seasoned, along with crispy Guizhou chili and fragrant peanuts for a rich flavor profile [3]. - The cooking process is simplified into three steps: marinate, fry, and stir-fry, making it easier for consumers to achieve authentic taste at home [3]. Market Positioning - The seasoning breaks traditional hot dish limitations, catering to various dining needs and casual moments, making it suitable for family gatherings and social occasions, while also transforming spicy chicken into a snack for casual eating [5]. - The product is positioned as a versatile option for different dining scenarios, enhancing the dining experience and becoming a highlight dish [5]. Industry Insights - According to a report by Zhiyan Consulting, chicken is the second most consumed meat in China, following pork, indicating a strong consumer base and broad acceptance of flavors [7]. - The company is actively expanding its poultry seasoning product line, having previously launched several chicken seasoning products, and the new spicy chicken seasoning is a strategic addition to its existing product matrix [7]. - As a brand under Tianwei Foods (stock code 603317), the company emphasizes high-quality ingredients and a rigorous quality control system to ensure safety and quality from farm to table [7].